The Competition Commission has launched an enquiry into three pharmaceutical companies regarding the pricing of cancer drugs, notably biologics.

The Board of Healthcare Funders of Southern Africa (BHF) has welcomed the enquiry saying that since their introduction, biologics used in cancer treatment have been significantly overpriced.

“We also believe there should be a widening of the scope of the investigation into the pricing of biologics used in the treatment of all diseases, not just cancer – biologics are also used for treatment of systemic lupus and rheumatoid arthritis for example,” said Head: Benefit & Risk at the BHF, Dr Rajesh Patel.

“The reality is that the incidence of diseases requiring biologic treatment interventions is increasing, so it is essential that the issues around cost of and access to these life-saving medicines are resolved,” continued Dr Patel.

Dr Patel noted that when you compare the pricing of these drugs from different manufacturers, they are all within a very narrow band, which suggests that even if there is no collusion, at the very least there is no active competition between the different pharmaceutical companies.

“While single exit pricing determines what pharmacies pay for medicine from suppliers or drug manufacturers, this pricing is set by the pharmaceutical company which is free to determine what it charges for its medicines,” said Dr Patel.

Dr Patel added that the BHF believes that South Africa is in urgent need of a scientific approach to determine how a medicine is priced, and when a medicine is priced excessively and thus unaffordable.

“Furthermore, the Medicines Act allows the set price in the private sector to be different to the state price for medicines as it is acceptable practice that the standardised private price of all drugs subsidises the low state price for the majority of poor or indigent South Africans. However, we have seen the subsidised cost of certain biologics to vary by more than 500% when compared with private sector costs – these price differentials are simply too enormous to overlook and demand deeper investigation,” concluded Dr Patel.